Money is such a rich topic (pun intended!), that it can sometimes be confusing to think about. From our work, we have learnt that not all money decisions are equal, and they require different strategies.

There are three basic types of money decisions:

1) Small & Snap Decisions

Do you automatically grab that coffee on your way to work everyday? Add that piece of chocolate to your weekly grocery shopping? Or wake up late and jump in that Uber to get to work on time?

What they are: Snap decisions are quick decisions we take in the moment. They are usually smaller dollar amounts. But if you feel very wealthy, or are a shopaholic, buying that thousand-dollar branded bag may very well be a snap decision! Snap decisions are usually made unconsciously, and are formed by repetition and habit. Thus, they are easy to make, but extremely hard to break.

Appropriate Strategy: The better we cultivate healthy habits from young, the better our snap decisions in the long term. Improving snap decisions later on in life, involves committing to strategies for habit change, and often taking a hard look at our addictions!
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2) Medium & Significant Decisions

Buying a new phone, getting a new credit card, or deciding whether to lend money to a friend are some significant decisions we may commonly face.

What they are: Significant decisions make you pause and take more deliberative effort, mostly because their dollar amounts make you feel a dent in your wallet, or because they have medium-term tradeoffs and consequences.

Appropriate Strategy: Improving significant decisions requires giving them deliberate time for discernment, research, and consideration of tradeoffs. But however rational we try to be, we are ultimately creatures of our emotions. Making a joyful decision requires both rationality and emotions to make a decision we don’t regret.
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3) Large & Strategic Decisions

Most of our money anxieties usually come from large and strategic decisions - deciding what job to take, where to live, what investments to make, what home to buy, whether to start a business, or who (and when) to marry!

What they are: Strategic decisions usually change the course of our lives for better or worse. Money plays an important role in all these decisions, and causes a lot more worry because it seems like there is no right answer, and no turning back. For someone who is financially challenged, even the act of paying for a bus fare, or buying lunch causes a lot of anxiety because it is a strategic decision. Try this out for yourself here.

Appropriate Strategy: This is the area where our relationship to money wields its greatest power. Without a deep examination of our money beliefs, our own values, and an understanding of what we really want in our lives, we tend to default to society's expectations when making strategic decisions. As they say, if you don't stand for anything, you fall for everything! This is where the role of getting expert advice, as well as communal pondering and sense-making increases our exposure to multiple narratives and choices that we are blind to, and in that process, helps us get in touch with our own values.

How does this change the way you understand your own financial decisions? Are you aware of what is driving your decisions at a deeper level? What strategies have worked best for you? Share with us in the comment section.

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